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The Sage Company issued $330,000 of 9% bonds on January 1, 2020. The bonds are due January 1, 2025, with interest payable each July 1
The Sage Company issued $330,000 of 9% bonds on January 1, 2020. The bonds are due January 1, 2025, with interest payable each July 1 and January 1. The bonds were issued at 104. Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Sage Company records straight-line amortization semiannually. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit ., 2020 Cash 346500 Discount on Bonds Payable 16500 Bonds Payable 330000 1, 2020 Interest Expense 14850 Discount on Bonds Payable 16500 Cash 31350 .31, 2020 Interest Expense 14850 Discount on Bonds Payable 16500 Interest Payable 31350 On January 1, 2020, Marin Corporation issued $460,000 of 7% bonds, due in 10 years. The bonds were issued for $428,743, and pay interest each July 1 and January 1. Marin uses the effective interest method. Prepare the company's journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 8%. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 1, 2020 Cash 428743 Discount on Bonds Payable 31257 Bonds Payable 460000 -, 2020 Interest Expense 17150 Discount on Bonds Payable 1050 Cash 16100 31, 2020 Interest Expense 17107 Discount on Bonds Payable 1007 Interest Payable 16100
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